Property investors in London, especially those buying 5 million pound plus homes, seem to finally shed their doubts over Brexit.
Transactions involving such homes were up a staggering 78 per cent in the fourth quarter compared to a year ago. The gains were not limited to this super-premium category - homes in the 2 million to 5 million pound range were also up 42 per cent, according to data released by Cushman & Wakefield Core, the consultancy.
Clearly, the decisive elections that returned Boris Johnson to power played a part. But more than that, investors reckon that a final verdict has been delivered on the Brexit question, and that there would no longer be any foot dragging.
”We are starting to witness a shift in dynamics with sellers’ confidence on the rise, and we anticipate lower negotiating margins compared to what was seen during the peak of the Brexit referendum,” said Alex Casaki, Head of London Desk at Cushman & Wakefield Core in a statement.
If this pace continues, buyers may not have much time to make up their minds. Prices are likely to firm up, especially at the top end.
The pent-up demand built over the last couple years is expected to exert upward pressure. “Furthermore, lower levels of supply volumes are expected to continue over 2020 as sellers take a firmer stance on offers,” the report adds.
In central London, the super-prime market - the location which has long been the trend setter - was the first to rise. “Prime central London prices have been fairly priced for some time, particularly for dollar-pegged buyers, but the recent movement at the top end of the market suggests that we are now at a bottoming out,” it adds.
“We are witnessing a rise in enquiries for prime central London properties from UAE buyers who have until now awaited clarity on Brexit. The recent majority win for Boris Johnson in the UK general elections has brought greater certainty on the UK’s departure from the European union”
Amidst the recent increase in deals, the number of available properties on the market at the end of last year was 19 per cent lower than a year ago.
“With the sterling to continue gaining upward momentum against the dollar - coupled with the potential introduction of an additional stamp duty surcharge for non-resident buyers in the upcoming budget - (it) is expected to bring forward greater interest for prime central London properties in the first quarter of 2020,” said Casaki. And “with UAE buyers potentially capitalizing on this window of opportunity.”
